Question 1

Common shareholders usually have all of the following rights except:

Accepted Answer

A) To share in the profits. 
B) To share in assets upon liquidation. 
C) To elect a board of directors. 
D) To participate in the day-to-day operations. 
A) To share in the profits. 
B) To share in assets upon liquidation. 
C) To elect a board of directors. 
D) To participate in the day-to-day operations.

Question 2

The December 31,2016,balance sheet of MBI Company included the following:
   
MBI completed the following transactions in 2016 relating to treasury stock:
March 17: Reacquired 2 million shares at $10.
May 17: Reacquired 2 million shares at $9.
August 10: Issued 3 million shares at $12.
Required:
Assuming MBI uses the cost method,prepare journal entries to record the foregoing transactions on a weighted average basis.

Accepted Answer

(in millions,except

Question 3

Outstanding common stock is:

Accepted Answer

A) Stock that is performing well on the New York Stock Exchange. 
B) Stock that has been authorized by the state for issue. 
C) Stock held in the corporate treasury. 
D) Stock in the hands of shareholders. 
A) Stock that is performing well on the New York Stock Exchange. 
B) Stock that has been authorized by the state for issue. 
C) Stock held in the corporate treasury. 
D) Stock in the hands of shareholders.

Question 4

Two of the three primary account classifications within shareholders' equity are:

Accepted Answer

A) Preferred stock and retained earnings. 
B) The par value of common stock and retained earnings. 
C) Paid-in capital and retained earnings. 
D) Preferred and common stock. 
A) Preferred stock and retained earnings. 
B) The par value of common stock and retained earnings. 
C) Paid-in capital and retained earnings. 
D) Preferred and common stock.

Question 5

The changes in account balances for Allen Inc.for 2016 are as follows:
 
Assuming the only changes in retained earnings in 2016 were for net income and a $25,000 dividend,what was net income for 2016?

Accepted Answer

A) $30,000. 
B) $20,000. 
C) $15,000. 
D) $ 5,000. 
A) $30,000. 
B) $20,000. 
C) $15,000. 
D) $ 5,000.

Question 6

The shareholders' equity of Red Corporation includes $200,000 of $1 par common stock and $400,000 par value of 6% cumulative preferred stock.The board of directors of Red declared cash dividends of $50,000 in 2016 after paying $20,000 cash dividends in 2015 and $40,000 in 2014.What is the amount of dividends common shareholders will receive in 2016?

Accepted Answer

A) $18,000. 
B) $22,000. 
C) $26,000. 
D) $28,000. 
A) $18,000. 
B) $22,000. 
C) $26,000. 
D) $28,000.

Question 7

The changes in account balances for Elder Company for 2016 are as follows:
 
Assuming the only changes in retained earnings in 2016 were for net income and a $50,000 dividend,what was net income for 2016?

Accepted Answer

A) $40,000. 
B) $60,000. 
C) $70,000. 
D) $90,000. 
A) $40,000. 
B) $60,000. 
C) $70,000. 
D) $90,000.

Question 8

The corporate charter of Alpaca Co.authorized the issuance of 10 million,$1 par common shares.During 2016,its first year of operations,Alpaca had the following transactions:  
What amount should Alpaca report as additional paid-in capital ‒ excess of par,in its December 31,2016,balance sheet?

Accepted Answer

A) $122 million 
B) $116 million 
C) $112 million 
D) $ 74 million 
A) $122 million 
B) $116 million 
C) $112 million 
D) $ 74 million

Question 9

Accumulated other comprehensive income is reported:

Accepted Answer

A) In the balance sheet as an asset. 
B) In the balance sheet as a liability. 
C) In the balance sheet as a component of shareholders' equity. 
D) In the statement of comprehensive income. 
A) In the balance sheet as an asset. 
B) In the balance sheet as a liability. 
C) In the balance sheet as a component of shareholders' equity. 
D) In the statement of comprehensive income.

Question 10

The corporate charter sometimes is known as (a):

Accepted Answer

A) Articles of incorporation. 
B) Statement of organization. 
C) By-laws. 
D) Registration statement. 
A) Articles of incorporation. 
B) Statement of organization. 
C) By-laws. 
D) Registration statement.

Question 11

Boxer Company owned 20,000 shares of King Company that were purchased in 2014 for $500,000.On May 1,2016,Boxer declared a property dividend of 1 share of King for every 10 shares of Boxer stock.On that date,there were 50,000 shares of Boxer stock outstanding.The market value of the King stock was $30 per share on the date of declaration and $32 per share on the date of distribution.By how much is retained earnings reduced by the property dividend?

Accepted Answer

A) $0. 
B) $150,000. 
C) $160,000. 
D) $300,000. 
A) $0. 
B) $150,000. 
C) $160,000. 
D) $300,000.

Question 12

Corporations are formed in accordance with:

Accepted Answer

A) The Model Business Corporation Act. 
B) Federal statutes. 
C) The laws of individual states. 
D) Federal trade commission regulations. 
A) The Model Business Corporation Act. 
B) Federal statutes. 
C) The laws of individual states. 
D) Federal trade commission regulations.

Question 13

On January 1,2016,Gerlach Inc.had the following account balances in its shareholders' equity accounts.
   
During 2016,Gerlach Inc.had several transactions relating to common stock.
   
Required:
Record the above transactions and events in journal entry format.

Accepted Answer

The answer of On January 1,2016,Gerlach Inc.had the following account...

Question 14

On October 15,2016,a 5% stock dividend was declared and distributed.The market value of the common stock on this date was $32 per share.Fractional share rights represented 100,000 shares.Cash was paid in lieu of issuing fractional share rights.On the date of declaration and payment,the company had 10 million shares of common stock outstanding.The par value of the common shares was $5.
Required:
Prepare any necessary journal entries to record the above events.

Accepted Answer

@#IMG-DLM& 
10 milli

Question 15

The costs of legal,promotional,and accounting services necessary to effect the sale of shares are referred to as share issue costs.How are these costs recorded? Compare this approach to the way debt issue costs are recorded.

Accepted Answer

Share issue costs reduce the net cash pr

Question 16

During its first year of operations,Cole's Electronics Inc.completed the following transactions relating to shareholders' equity.
January 5: Issued 1,000,000 shares of common stock for $25 per share.
February 12: Issued 20,000 shares of common stock to accountants for $500,000 of professional services.
The articles of incorporation authorize 5,000,000 shares of common stock with a par value of $1 per share and 1,000,000 preferred shares with a par value of $100 per share.
Required:
Record the above transactions in general journal form.

Accepted Answer

The answer of During its first year of operations,Cole's Electronics...

Question 17

What is the difference between a stock split and a stock split effected in the form of a stock dividend?

Accepted Answer

A stock split is usually motivated by a

Question 18

The prescribed accounting treatment for stock dividends implicitly assumes that shareholders are fooled by "small" stock dividends and benefit by the market value of their additional shares.Explain this statement.Is it logical?

Accepted Answer

For a stock dividend of less than 25%,a

Question 19

On January 1,2016,the board of directors of Goby Inc.declared a $540,000 dividend.The following data is from the balance sheet of Goby on that date:
 
How much is the liquidating dividend?

Accepted Answer

A) $140,000. 
B) $240,000. 
C) $290,000. 
D) None of these answer choices is correct. 
A) $140,000. 
B) $240,000. 
C) $290,000. 
D) None of these answer choices is correct.

Question 20

Accumulated other comprehensive income:

Accepted Answer

A) is a liability. 
B) might include prior service cost from pension plan amendments. 
C) includes accumulated pension expense. 
D) is reported in the income statement. 
A) is a liability. 
B) might include prior service cost from pension plan amendments. 
C) includes accumulated pension expense. 
D) is reported in the income statement.

Common shareholders usually have all of the following rights except:

Outstanding common stock is:

Two of the three primary account classifications within shareholders' equity are:

The changes in account balances for Allen Inc.for 2016 are as follows: Assuming the only changes in retained earnings in 2016 were for net income and a $25,000 dividend,what was net income for 2016?

The changes in account balances for Elder Company for 2016 are as follows: Assuming the only changes in retained earnings in 2016 were for net income and a $50,000 dividend,what was net income for 2016?

The corporate charter of Alpaca Co.authorized the issuance of 10 million,$1 par common shares.During 2016,its first year of operations,Alpaca had the following transactions: What amount should Alpaca report as additional paid-in capital ‒ excess of par,in its December 31,2016,balance sheet?

Accumulated other comprehensive income is reported:

The corporate charter sometimes is known as (a):

Corporations are formed in accordance with:

On January 1,2016,Gerlach Inc.had the following account balances in its shareholders' equity accounts. During 2016,Gerlach Inc.had several transactions relating to common stock. Required: Record the above transactions and events in journal entry format.

The costs of legal,promotional,and accounting services necessary to effect the sale of shares are referred to as share issue costs.How are these costs recorded? Compare this approach to the way debt issue costs are recorded.

What is the difference between a stock split and a stock split effected in the form of a stock dividend?

The prescribed accounting treatment for stock dividends implicitly assumes that shareholders are fooled by "small" stock dividends and benefit by the market value of their additional shares.Explain this statement.Is it logical?

On January 1,2016,the board of directors of Goby Inc.declared a $540,000 dividend.The following data is from the balance sheet of Goby on that date: How much is the liquidating dividend?

Accumulated other comprehensive income:

Environment and Theoretical Structure of Financial Accounting

Review of the Accounting Process

The Balance Sheet and Financial Disclosures

The Income Statement, comprehensive Income, and the Statement of Cash Flows

Income Measurement

Time Value of Money Concepts

Cash and Receivables

Inventories: Measurement

Inventories: Additional Issues

Property, plant, and Equipment and Intangible Assets: Acquisition and Disposition

Property, plant, and Equipment and Intangible Assets: Utilization and Impairment

Investments

Current Liabilities and Contingencies

Bonds and Long-Term Notes

Leases

Accounting for Income Taxes

Pensions and Other Postretirement Benefits

Share-Based Compensation and Earnings Per Share

Accounting Changes

The Statement of Cash Flows

Filters

Exam 18: Shareholders Equity

Common shareholders usually have all of the following rights except:

Outstanding common stock is:

Two of the three primary account classifications within shareholders' equity are:

The changes in account balances for Allen Inc.for 2016 are as follows: Assuming the only changes in retained earnings in 2016 were for net income and a $25,000 dividend,what was net income for 2016?

The changes in account balances for Elder Company for 2016 are as follows: Assuming the only changes in retained earnings in 2016 were for net income and a $50,000 dividend,what was net income for 2016?

The corporate charter of Alpaca Co.authorized the issuance of 10 million,$1 par common shares.During 2016,its first year of operations,Alpaca had the following transactions: What amount should Alpaca report as additional paid-in capital ‒ excess of par,in its December 31,2016,balance sheet?

Accumulated other comprehensive income is reported:

The corporate charter sometimes is known as (a):

Corporations are formed in accordance with:

On January 1,2016,Gerlach Inc.had the following account balances in its shareholders' equity accounts. During 2016,Gerlach Inc.had several transactions relating to common stock. Required: Record the above transactions and events in journal entry format.

The costs of legal,promotional,and accounting services necessary to effect the sale of shares are referred to as share issue costs.How are these costs recorded? Compare this approach to the way debt issue costs are recorded.

What is the difference between a stock split and a stock split effected in the form of a stock dividend?

The prescribed accounting treatment for stock dividends implicitly assumes that shareholders are fooled by "small" stock dividends and benefit by the market value of their additional shares.Explain this statement.Is it logical?

On January 1,2016,the board of directors of Goby Inc.declared a $540,000 dividend.The following data is from the balance sheet of Goby on that date: How much is the liquidating dividend?

Accumulated other comprehensive income:

Environment and Theoretical Structure of Financial Accounting

Review of the Accounting Process

The Balance Sheet and Financial Disclosures

The Income Statement, comprehensive Income, and the Statement of Cash Flows

Income Measurement

Time Value of Money Concepts

Cash and Receivables

Inventories: Measurement

Inventories: Additional Issues

Property, plant, and Equipment and Intangible Assets: Acquisition and Disposition

Property, plant, and Equipment and Intangible Assets: Utilization and Impairment

Investments

Current Liabilities and Contingencies

Bonds and Long-Term Notes

Leases

Accounting for Income Taxes

Pensions and Other Postretirement Benefits

Share-Based Compensation and Earnings Per Share

Accounting Changes

The Statement of Cash Flows

Filters